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Business News/ Companies / News/  Goldman Sachs names John Waldron president
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Goldman Sachs names John Waldron president

Incoming CEO David Solomon named John Waldron on Thursday to be the firm's next president and chief operating officer, the second-most-powerful position in the bank.

Photo: ReutersPremium
Photo: Reuters

New York: Goldman Sachs Group Inc.’s investment bankers are completing a takeover of their own firm.

Three of the most important roles now are going to be held by executives who rose through the dealmaking unit, overhauling the masthead of a firm that for years was Wall Street’s dominant trading powerhouse. The reversal, which began in the wake of the financial crisis, is complete with a changing of the guard at the very top.

Incoming Chief Executive Officer David Solomon named John Waldron on Thursday to be the firm’s next president and chief operating officer, the second-most-powerful position in the bank. In the process, Solomon abandoned Goldman Sachs’s long-cherished practice of letting top performers split such weighty roles. Another rising executive, consumer-banking chief Stephen Scherr, was tapped to become chief financial officer.

Waldron, who runs investment banking, will assume the new post on Oct. 1, the New York-based company said in a statement. Scherr, who initially rose through the same unit, will become finance chief in November.

And in a surprise move, Solomon dispatched Martin Chavez, the current CFO, back to the trading division, making him the third co-head of the bank’s largest unit by revenue. That leaves open the possibility for Chavez’s star to rise within the firm again, if he can help put the division back on a stronger footing, although many doubt it can ever regain its pre-crisis glory.

Lloyd Blankfein, who came up through fixed-income trading, is set to step down as CEO at the end of this month. His longtime deputy, veteran trader Gary Cohn, left in late 2016 for a more raucous stint at the White House. And some of the firm’s most-experienced trading leaders also have moved on.

Solomon had already tinkered with the trading group earlier in the summer, when he brought on another investment banker as a co-head alongside Ashok Varadhan, who just last year was looking to exit in search of other opportunities, people with knowledge of the matter said at the time.

“As the firm prepares for the next phase of growth, I am pleased that Marty will help lead our securities business as it continues to undergo rapid transformation," Blankfein said in the statement. “I am confident that John and Stephen will represent a strong, effective management team under David’s leadership."

Within the bank, Waldron was widely seen as the frontrunner to become president, a post often shared between two executives. He and Solomon are known to be close after climbing together through the investment-banking division.

The relationship between Waldron, 49, and Solomon, 56, took root when they worked together in the eat-what-you-kill world of Bear Stearns Cos. The two have bought properties on the same island in the Bahamas and at Silo Ridge, a private enclave set among the rolling hills of New York’s Hudson Valley.

While Solomon is known as a demanding boss, Waldron has crafted a softer image, with a less taxing approach as the head of Goldman’s most profitable unit. Those who know him describe him as a stereotypical investment banker -- a good golfer, consummate salesman and an effective advocate.

Fox Patriarch

In the broader world of M&A, Waldron is known for the ties he’s forged with corporate leaders such as Rupert Murdoch. Recently, that’s meant advising the patriarch of the Fox empire on selling a key chunk of his business to Walt Disney Co. in a $71 billion transaction.

Scherr has led Goldman’s consumer and commercial banking division since last year. He previously served as chief strategy officer, leading a team that helps decide where the bank should pursue new lines of business or acquisitions of its own.

Some inside the firm had speculated that Waldron might become sole president, despite its traditions. Scherr was in charge of one of Goldman’s biggest efforts of recent years, expanding into mainstream banking -- a departure from the bank’s core strength. But relations between him and Solomon have been strained at times, people with knowledge of the matter said. The new management structure preserves Scherr’s clout, just short of running operations companywide.

“We like the changes," declared Credit Suisse Group AG analyst Susan Katzke. “They play to Goldman’s strengths and the executives’ strengths."

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Published: 14 Sep 2018, 01:32 AM IST
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